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Last updated on Thursday, November 13, 2014
(STATEHOUSE) - A legislative study committee is recommending another baby step toward abolishing the business personal property tax.
The panel is recommending that businesses who pay only a nominal amount be exempted entirely. This year's legislature gave counties the option of granting that exemption for businesses with less than $25,000 in equipment, but counties have universally ignored it.
Senate Tax and Fiscal Policy Chairman Brandt Hershman (R-Buck Creek) says imposing the tax on that small an amount creates bookkeeping and processing costs for both the businesses and county government that costs more than the tax itself.
Local governments have taken a dim view of efforts to lower the business personal property tax, saying it would put even more pressure on already tight budgets. Hershman says the small-business exemption would cost counties only a tiny amount in many cases, but says he's open to the possibility of replacing it with a flat fee.
The study panel also recommended a change in the state's depreciation floor, which says at least 30% of equipment's original value remains taxable, no matter how old it is. The panel proposes pushing that floor as low as 15% for some classes of equipment that often remain in use for more than 12 years. Hershman says the change would be a boost to affected businesses while causing only a minimal decrease to total tax collections.
The panel's recommendations are nonbinding, but Hershman says he's hopeful they'll move forward in the upcoming legislative session.
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